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Rates pinch homeowners discusses the perils of option arms or creative financing. Here’s my take: These loans are very complex. If the loan terms confuse you, either the lender didn’t do their job explaining the loan or you simply just don’t comprehend all the math involved.

Start Rate is the bait:

For their new loan, Cordova- Holmes and her husband chose a so-called option adjustable-rate mortgage, which carried an introductory rate of 2.35 percent and gave her multiple payment choices each month. “I had a lot of financial obligations,” says Cordova- Holmes, an accountant who lives near Detroit.

Too good to be true:

Two years later, however, the interest rate on her loan has jumped to 8.75 percent, her loan balance has climbed to $324,000, and her minimum monthly payment has risen to $2,257. She says the terms of the loan weren’t clearly spelled out.

Deliquency increases:

Mortgage delinquency rates hit 2.32 percent in the second quarter after bottoming out at 2.06 percent in the fourth quarter 2005, according to an analysis by Equifax/Moody’s Economy.com.

The portion of adjustable-rate mortgages that were at least 90 days past due has climbed 141 percent in the past year, according to a recent study by Credit Suisse that looked at loans made to borrowers with good credit. That compares with a 27 percent rise in such delinquencies for fixed-rate mortgages.

Foreclosure is around the corner:

Until recently, most mortgage-payment problems were an unfortunate byproduct of major life changes, such as job loss, medical problems, divorce or a death in the family. But for the new wave of troubled borrowers, the problems stem largely, or in part, from the structure of their mortgage, housing counselors say.

… according to the new scoring model. I have yet to see a credit report reflect the news scores.

Credit Agencies Aim to Simplify Scoring
Tuesday March 14, 11:55 am ET
By Eileen Alt Powell, AP Business Writer

Three Large Credit Agencies Adopt Uniform Credit Score Aimed at Simplifying Loan Process

NEW YORK (AP) — The three major consumer credit reporting agencies announced Tuesday that they have created a new credit scoring system aimed at simplifying the loan process for both lenders and borrowers.The announcement by Equifax, Experian and TransUnion said the new “VantageScore” was “a direct result of market demand for a more consistent and objective approach to credit scoring.”

The agencies in the past each used their own proprietary formulas to create their own scores, meaning that a lender dealing with a consumer’s application for a credit card or a mortgage might have to reconcile three widely different scores.

With the new system, a single methodology will be used to create the scores.

“Under the new scoring system, credit score variance between credit reporting companies will be attributed to data differences within each of the three consumer credit files and not to the structure of the scoring model or data interpretation,” the agencies said in a joint statement.

It added that VantageScore “will provide consumers and businesses with a highly predictive, consistent score that is easy to understand and apply.”

Kerry Williams, group president of Experian’s credit services division, told The Associated Press that his agency was making the new scores available immediately to financial institutions and expected wide adoption, but said he did not expect the scores to be rolled out for consumers until later this year.

Credit scores are important because they measure how much debt a consumer is carrying and how well the consumer keeps up with bills.

The higher the score, the more credit worthy the consumer is considered and the lower the interest rate the consumer is likely to be charged.

The three credit agencies termed the move to a unified score as “unprecedented.”

The scores will range from 501 to 990. The top end is slightly higher than scores currently in use.

Colleen Tunney, spokeswoman for TransUnion, told a conference call with reporters and credit industry representatives that the new score was created by looking at millions of consumer files at the same time to ensure consistent readings across the three bureaus’ data.

She and spokesmen for Equifax and Experian said it was not immediately clear how quickly the new score would be adopted by lending institutions.

“Step one is we’re talking to our credit grantors as we speak,” said David Rubinger, spokesman for Experian. He said each agency was marketing the new score to its own customers.

He added: “For any score to have merit in the marketplace, all parties need to be at the table.”

Many lenders, especially those in the mortgage business, use FICO scores, which are named for the Minneapolis-based Fair, Isaac Corp. which developed them. Others use proprietary scores from the individual credit bureaus or use the bureau data to generate their own scores.

Spokesmen for Fair, Isaac could not immediately be reached for comment.

Rubinger said the new score was expected to reduce the variance in a consumer’s scores by about 30 percent compared with what it was under the old system. He gave no other details.

He said the score would reflect a consumer’s frequency of borrowing, delinquency in paying bills and other “file content,” but had no specific weights for the components.

In a separate statement, Experian said the new scores will be grouped on “the familiar academic scale.” Experian gave these groupings:

A — 901-990

B — 801-900

C — 701-800

D — 601-700

F — 501-600

Experian said it was hoped that “as consumers increase their awareness of the importance of credit scores and credit reporting, the consistency of VantageScore will provide the type of information they need to evaluate their credit standing and make sound financial decisions.”

VantageScore is being independently marketed and sold separately through each of the three national credit reporting companies via licensing agreements with VantageScore Solutions LLC, the joint announcement said. The spokesmen said that VantageScore was jointly owned by the three credit bureaus. They said it did not yet have a headquarters, although an informational Web site had been set up at http://www.vantagescore.com.

The credit reporting agencies are operated by Equifax Inc. of Atlanta, Experian Information Solutions Inc. of Costa Mesa, Calif., and TransUnion LLC of Chicago.

http://www.equifax.com

http://www.experian.com

http://www.transunion.com

Here are reasons why you have different credit scores:

There are 3 different credit reporting agencies. Each one gives you a score. They work independent of each other.

Mortgage lenders typically look at your middle score as your qualifying score. there are some lenders that will take the high score into consideration as well. But as a general rule when applying for a mortgage always give the mortgage broker your middle score if you know it.

Usually a lender will use the middle of the three scores to qualify a borrower and to chose rate.

One creditor may report to only to bureaus A and B, another creditor may report to bureaus B and C, and yet another creditor may only report to bureau B. For this reason, the exact information that each of the credit bureaus has on file about you varies, and therefore so does your score with each bureau.

The primary reason for discrepancies in the three different credit scores is that each credit bureau uses a different scoring module. The scoring system used by Experian is the Fair, Isaac module, the one used by Trans Union is called Empirica and Equifax uses a scoring system called Beacon.

You have three different scores because each bureau has a different system for placing a numerical value on your credit quality. Another reason these scores can vary so much is that some creditors only report to certain bureaus and therefore the other bureaus may not be scoring that particular credit file which can cause a difference in actual scoring.

There are nonconforming lenders that will use average your scores or even use the highest score. Your mortgage professional’s job is to place you with the lender that would be most advantageous to you.

The information that the credit bureaus have on file about you is provided by the creditors who you currently have credit with, as well as the ones you’ve dealt with in the past several years.

When disputing incorrect information on your credit report, be sure to write to all three credit repositories. If only one is notified of the erroneous item, your scores from the other two bureaus would not improve.

Credit score differ because of the credit items that are being reported to each credit bureau, all 3 credit repositories are independent of each other, and because their are different credit scoring modules. Some creditors only report to 1 or 2 credit repositories while others may report to all 3. Trans Union is different from Equifax and they are both different from Experian. By all 3 being independent they all have their own individual credit scoring systems. Lastly, just like there are Windows 98, Windows 2000, Windows XP, etc… as operating systems for a computer, there are different versions of credit generation also. Some lenders may use an older credit operating system simply because it is cheaper to obtain credit reports than the latest credit operating system out available.

You have the right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information in your credit file. When a credit reporting agency receives a dispute, it must reinvestigate and record the current status of the disputed items within a “reasonable period of time,” unless it believes the dispute is “frivolous or irrelevant.” If the credit reporting agency cannot verify a disputed item, it must delete it. If your report contains erroneous information, the credit reporting agency must correct it. If an item is incomplete, the credit reporting agency must complete it.

Don’t Ignore the Problem. If you just hope the problem of errors on your credit history will disappear, then be prepared to wait a long time. Credit information can remain on your report for as long as seven years and up to ten years in cases of bankruptcy.

The credit agencies update every 30 days. If you Dispute an account on your credit report, the agency is obligated to respond to your request with in 30 days. With accurate proof of a faulty account, you will be able to remove that from your credit report

You are allowed a copy of your credit once a year from each credit bureau. Along with your credit report will be a dispute form.

If there is incorrect information on your credit report such as a payment that was reported late that should not have we will be able to correct the information within 3-5 days by going directly through the 3 major credit bureaus and get a rescore to reflect what your credit score should be.

If you are unable to spend the time to write the letters yourself then you might want to hire a credit repair company to do this for you. They will act on your behalf to write the necessary letters to the 3 credit bureaus. There are many companies to choose from these days and it might be in your best interest to consult with your Mortgage Broker as to which company will give you the best service.

The best thing to do to keep an eye on your credit report is to join a Credit Monitoring service such as PrivacyGuard.com they even provide a $1 trial for 2 months. You get all three credit reports with the scores included.

Improving your credit score can be as simple as spreading a large amount of debt on one credit card, over three or four different credit cards.

Prior to applying for a mortgage fixing all credit report errors will optimize your chances of obtain the best financing terms available.

If you find an error, the Fair Credit Reporting Act requires credit bureaus and organizations that provide information to them to correct the mistake. But you have to get the ball rolling by requesting an investigation.

Under The Fair Credit Reporting Act effective October 1, 1997, a credit reporting agency has 5 days from the date of receipt of a written investigation request to contact the appropriate credit grantor about investigation the complaint(s) and receive a reply back within 30 days of the original notification date. Within 5 business days after the completion of the investigation, the credit bureau (i.e.: Equifax, Trans Union, Experian) must send a written report to the consumer with its findings with a copy of the revised report if there were nay changes made.

If a credit bureau can not verify that a disputed item is correct as reported, it must modify or remove it from the consumers’ file. If the tradeline confirms a later date that the information was indeed correct, the credit bureau will add the information back into the consumers’ file. It will notify the consumer in writing as to the changes, within 5 days of the change.

DO NOT expect information to be deleted just because a collection account or debt has been paid. Derogatory items will remain on your report for 7 years. The 7 year clock on a derogatory item falling off your report does not start until the item has been satisfied.

The consumer must write a letter of dispute regarding the erroneous information reported by a specific credit reporting agency. The letter must reference; Your full name, Address, Social Security number, the tradeline Account numbers, Brief statement of what is incorrect. Copies of supporting documents (if any) The letter MUST be sent by overnight mail, with return receipt requested. This verifies when the 30 day clock starts ticking.

When disputing questionable items in a credit report, always remember to dispute with all three major credit bureau agencies. When applying for a mortgage, all lenders look at items reported by all three credit bureaus.

Make sure to keep the “acknowledgment” letters that the bureaus send to you at about 2 weeks. There is a date they have officially acknowledged they received your letters in which the 30 days in the FCRA should start.

Rapid rescoring services are an effective, legitimate ampersand growing sector of the consumer credit industry. The good news is that they work. But you can’t use these services directly. Companies that offer rapid rescoring work directly with mortgage lenders and brokers, not with consumers. If you are serious about fixing errors on your credit report, contact your mortgage broker or lender and talk to them about credit repair today.

The credit bureaus are not government run agencies, but are for profit, multi billion dollar industries that make money off of selling your personal information. It is proven that they make more money off of you with bad credit, rather than good credit, so don’t believe everything that they tell you in results you receive back. Make sure to spend time, in detail, looking at your results and ensuring things like the date of verification have the current date. 50% of Trans Union’s verified accounts have old verification dates, which means they never investigated that account, yet put verified as a result anyway.

It is up to the consumer to keep a close watch on their credit. You are allotted one free report a year. But checking your credit once a year is not enough. Experts recommend that you check your credit report before you go out looking for a loan. That means before buying that car or refinancing your home. Also, just as a rule of thumb, you should check your credit at least twice a year in addition to the times listed above. If you are not shopping for any loans, it would still be wise to check your credit every four months. Be sure to utilize the one free report from each of the credit scoring bureaus.

If a creditor verifies a previously deleted item after the 30 day window, they can add it back on. A notice of this Reinsertion must be sent the consumer within 5 days.

The “30 day rule” is a credit repair myth and is not used by knowledgeable credit repair companies or consumers. This 30 day rule only causes reinsertions if not used properly. If the bureau is forced to delete an item at day 31, then most likely most of those accounts will reappear later, with proper reinsertion notification. The very next line in the FCRA states that if the creditor or credit bureau verifies an account late, or after the 30 day timeline, they can simply add it back on.

Your credit picture is very important and should be kept up the entire time. Do not wait until the last minute (I.E. you want to apply for a mortgage next month). Credit repair is a process and you should allow appropriate time to remove items from the bureaus

Credit reporting is an imperfect system and there are times when you’re credit is tainted and it’s not your fault. Equifax, Experian, and Trans Union don’t always report the same information.

A FICO score is a number that rates a borrowers credit record. The score is based on a number of factors, including how well debts have been paid off, current levels of debt, types of credit, and length of credit history. Scores generally range from 350 to 900.

However if you are applying for a very aggressive loan, like a pay option arm, or responding to a promotion for excellent credit borrowers, multiple recent mortgage lateness’s will make it very challenging for us to get you a loan with the terms you are expecting. More than your improving your FICO score on your credit report, working to remove lates through credit repair will help ensure you get the home mortgage refinance or buy new home mortgage you deserve.

If there is incorrect information on your credit report such as a payment that was reported late that should not have we will be able to correct the information within 3-5 days by going directly through the 3 major credit bureaus and get a rescore to reflect what your credit score should be.

Credit scoring has been utilized by lenders for over 30 years. Credit scoring is a technology used by credit grantors to qualify the risk associated with extending credit to a given borrower. Risk is quantified by means of a score card which calculates a numeric value, or score, for a credit applicant a lender wants to evaluate. Score calculation is done based on information that has been determined to be indicative of future credit performance. There are many types of scoring methods currently utilized today including credit scoring, applicant scoring, behavioral scoring and several others. The type most relevant to the mortgage industry is credit scoring and among the most widely recognized is the FICO SCORE.

You should periodically review your FICO score and see if there is anything you can do to improve your score.

The are five main categories of information that the FICO score evaluates:1. Credit Payment History: 35% 2. Credit Balances: 30%3. Credit History: 15%4. Credit Inquiries: 10%5. Credit Types: 10%

Credit Payment History: 35%At 35% Credit Payment History weighs the most. While events such as a bankruptcy, foreclosure or tax liens will have the greatest negative impact on your score, multiple and/or recent late payments have a tremendous impact as well.

A new law allows borrowers to receive a free copy of your credit report from each of the credit reporting agencies every year. Visit www.annualcreditreport.com

The Fair, Isaac Corporation,(FICO) developed the formula for credit scoring. In general, the higher the score, the more creditworthy a borrower is in the eyes of the lender. A score of at least 680 indicates the borrower is very creditworthy.

Credit Balances: 30%What is your credit balance to your credit limit? The Outstanding Credit Balance ratio has the second highest weight on your credit score. High balances on your credit cards can be viewed as a red flag since it’s an indication that you may be overextended. If you have multiple credit cards, you may want to spread the wealth to keep the credit balances to credit limit ratio low.

Credit Inquiries: 10%Opening a new credit account doesn’t harm your credit score dramatically especially after you make the first payment. However, credit inquiries can negatively impact your score. Generating many credit inquiries exudes that you are trying to secure a large amount of credit or you are being turned down by lenders and have to apply elsewhere.

FICO score is one scoring system used by Experian, a credit profiling company. Two other companies have similar scoring systems that are just as widely accepted by lending banks. Together with Experian’s FICO score, credit reports that contain Trans Union’s Empirical score and Equifax’s Beacon score are often referred to as the Tri-Merge Report.

To keep a healthy or high FICO score you will need to at the very least do these 3 things:1 - Keep your balances on your credit cards to 50% of what your limit is2 - Always pay your bills on time - if you have to hold a bill and pay late make sure it’s not more than 30 days to post. 30 day lates really bring your credit scores down 3 - Try not to cancel cards you have had for a long time. Length of time on accounts plays a part into the scoring

For more information on how credit scores are developed, please visit: air, Isaac and Company (FICO)www.fairisaac.com200 Smith Ranch Road San Rafael, CA 94903ph: (415) 472-2211

There are many credit fixing agencies that will help raise fico scores for a potential borrower so they can put themselves in an overall better position for obtaining a loan. If your fico scores are low, there are still plenty of things that can be done to help bring scores up. Sometimes it takes little time and sometimes it takes longer but in the end the results can be fantastic.

Credit History: 15%Credit History is a reflection the length of time that you’ve had accounts open. You’re rewarded for keeping long term debt. Older credit accounts that have been used more frequently will have more weight than those that are newly opened or used with less frequency.

Most lending institutions categorize scores in to ranges. Generally scores above 800 are considered excellent, scores from 700-799 are considered good, scores from 600-699 are average, scores from 500-599 are considered poor, for scores below 500 there are very few lending options available. There are many lenders and each has their own guidelines for qualifying borrowers.

Credit Types: 10%This percentage of your FICO score is based on your mix of credit. Do you have a good mix of credit cards, retail accounts, installment loans, finance company accounts or mortgage loans? It looks at the whole picture and totals how much of each type of account that you have.

In the early 1980s the three major credit bureaus, Experian, Equifax and Trans Union all worked with the Fair, Isaac company to develop generic scoring models that allow each bureau to offer a score based solely on the contents of the credit bureau’s data about an individual. Creditors-especially those in the mortgage industry-frequently use the scores when deciding who receives loans. They can order your score, commonly called a FICO score, from one of the bureaus, but it only draws upon information from your credit report. Individual creditors often also consider other information, such as your salary or how long you have been employed at the same company when making loan decisions.

Your mortgage broker will be happy to review your FICO score and your complete credit report with you in detail, which is often a much better alternative to struggling to make sense of the abbreviated reports delivered by free credit report websites. Ask your mortgage professional for more information about this important subject.

Most people do not have perfect credit. Most people have FICO scores ranging from the low 600s to the high 700s. Mortgage applications typically are not rejected because of a few late payments.

Credit reports are your lifeline in the financial word in regards to obtaining financing. You want to be sure that your history is reflected accurately. Many times people find out too late that their credit report is not correct. It is a good idea to review your credit report once every 3 months to insure all your account history is accurate. Common problems on credit reports:- Not your account- Loans reporting a balance which have been paid off- Collection accounts that are incorrect- credit accounts discharged in bankruptcy- Judgments that have been satisfied not reporting as satisfied- Credit cards which you were only an authorized user on showing lates- Many more These problems can lead to lower scores and less than ideal rates. Correcting your credit report is not an overnight task, so plan ahead and make sure you have the most accurate credit profile as possible. You can dispute your accounts individually, or you can hire a company to work with you on fixing the incorrect information.

Reviewing your complete credit report with one of our mortgage professionals is the best way to fully analyze your personal credit situation and determine which accounts it would be most beneficial to consolidate in a cash out debt consolidation scenario.

The first thing you need to do is gain access to your credit report. You can buy reports from Equifax, Trans Union and Experian, the largest credit reporting agencies. Buy a report from each, because one may contain errors that affect your credit score.

When applying for a mortgage, your credit rating is one of the first things a lender will look at. They’ll be loaning you a large amount of money, and if it seems that you are likely to default on the loan, lenders will hesitate to loan you the money. Usually, lenders compensate for this higher risk with higher interest rates, so it is in your best interest to have a high credit score.

Credit reports that contain information from the three major credit repositories are called Tri-merge Reports. Base on each individual’s credit history, the three repositories each assigns a numeric value, called Credit Score. In addition to a credit profile free of negative entries such as late payments and collection accounts, an acceptable credit score is also important to mortgage lenders.

If you are looking to get a mortgage for a home then it might make sense for you to contact your mortgage broker and have them pull credit. Your broker or loan officer will go over the report with you and let you know what needs to be addressed if anything. The most important things is to pull you credit now. Don’t wait until you have a contract on the house because you may find that you need time to work on some issues that show up on the report.

Your credit score is calculated as a statistical summary of all the different information in your credit report, including - History of Paying Bills- How much debt you have outstanding- length of time you’ve had credit- number of cards and loans- your credit limits- the types of credit you have

You are entitled to one free credit report, from each of the three reporting agencies, once a year. When obtaining a mortgage line it is good to review your own credit history first. Banks and lenders will rely on these reports to represent your willingness and your ability to repay the monthly payments in a timely fashion. If you find a account reporting in error, it is quite simple to dispute an error online, directly with the agency reporting the error. The websites for the three agencies, offer this service when you order a report and the process of disputing an error is handled directly online.

There are five major types of information used to calculate a FICO score at any given point in time are listed below. Each type of information counts as a percentage of a total FICO score: - 35% Payment History

Provided by the major credit bureaus, Equifax, Experian ampersand Trans union, a credit report provides a detailed account of your credit history.

A Credit Report will cover your individual credit, including your history and present credit standing. The report is a very important when used in the mortgage process, so keeping a good credit rating must be a top priority for you, if you plan to buy a house.

When applying for a mortgage, all people whose names appear on the title to the property must have their credit pulled and reviewed by the lender.

Your lender will call you to review your credit report with you, and can determine which items would be most helpful to pay off using the proceeds of the loan, and those items which much be paid off as a condition of getting the loan.

In order to apply for a mortgage, you must provide your lender with your name, date of birth or dob, social security number or ssn and an authorization to run your credit.

If your balance is over 50% of your credit limit the credit bureaus consider this card to be maxed out. Ideally you should keep your credit cards under 30% of your credit limit. Having 3 credit cards all with balances of less than 30% of the credit limit will give you the best credit score. Older accounts in good standing have a positive impact on your credit score.

Your mortgage broker may pull either a single bureau report, a double bureau report or a tri-merge report when he pulls your credit. There are 3 credit repositories that they can pull your credit report from: Trans Union, Equifax, and Experian. A single credit report would simply be just one of the repositories listed, a double would be 2 of the 3 and a tri-merge is when they pull all three. Generally most lenders want a tri-merge report pulled and they use the middle score of the 3. If the lender allows a dual bureau report then they will usually use the lower score of the 2 scores pulled.

Most brokers work with someone that repairs credit, make sure to ask for a reference. Most credit Bureaus are offering mortgage brokers a program that will tell them how to improve you credit score quickly in order to get the borrower their desired loan. Many changes can be made to a borrower’s credit to improve their score in as little as 30 days.

Your scores can take a hit if you have your credit pulled many times by different companies. They do however allow you many credit pulls within 15 days and will only count that as one pull when you are shopping for a mortgage. You might have to provide a letter of explanation for why these pulls showed up on your report.

A credit report contains a vast amount of information, most of which is very germane to the borrowers qualification for a particular mortgage program. Many consumers mistakenly believe that the only thing that matters are the scores that are generated from the report. The fact is that most often items in the “guts” of the report are just as important in the underwriting decision process as the scores.

Reducing your balances on revolving accounts can increase your credit score in a short amount of time. Make sure to ask what the balances are reporting on your credit report.

Other sites: Mortgage Broker | Mortgage banker | New Credit Card Minimum Payments | What is a Pay option ARM | MIP | Quick Closing | VA | Delinquency | What not to do after you apply for a Mortgage| Pay Option Arm Calculator

A number representing the possibility a borrower may default; it is based upon credit history and is used to determine ability to qualify for a mortgage loan.

If you are shopping for a mortgage with a lot of lenders and we tell you while reviewing your credit report with you that your score has suffered due to excessive inquiries, we may ask you to prepare a letter of explanation which may help us to minimize the effect of the penalty in getting you the loan program you deserve.

There are 5 factors that impact your credit score:1) Payment History2) Outstanding Credit Balances3) Credit History4) Type of Credit5) Inquiries

Credit scoring has been utilized by lenders for over 30 years. Credit scoring is a technology used by credit grantors to qualify the risk associated with extending credit to a given borrower. Risk is quantified by means of a score card which calculates a numeric value, or score, for a credit applicant a lender wants to evaluate. Score calculation is done based on information that has been determined to be indicative of future credit performance. There are many types of scoring methods currently utilized today including credit scoring, applicant scoring, behavioral scoring and several others. The type most relevant to the mortgage industry is credit scoring and among the most widely recognized is the FICO SCORE.

A value (score) is assigned base on the following criteria, in the order of their weight in the scoring formula, payment history, outstanding balances in relation to credit limits, length of credit history, number of inquiries, and the type of accounts.

There are three major credit bureaus that lenders use to “pull” your credit. These companies are:• Experian (Formerly TRW)• Trans Union• Equifax Each of these companies maintains a separate credit report on you based off information gathered from your creditors. Depending on who your lenders are and which Credit Bureau’s they report to, if not all three, will determine the differences in your credit report from each company. At a bare minimum you need to order a report from one of these companies directly or through an intermediary. The best thing you could do is order a Tri-Merge report. This report is one that merges the information from all three Bureau’s into one report so you can see the information that all three credit providers are reporting about you. Mortgage Professional will have access to this report for a reduced fee.

In order for these accounts to be added to your credit report you must actually use the newly issued card at least once to activate it. It usually takes about 90 days for these type of accounts to be reported on your credit report.

The scoring model will differ depending on whether you’re applying for a mortgage, credit card, auto loan, or insurance.

Credit scores you get from companies that advertise online many times are in fact not the actual score your Loan Officer will see. These scores are not based on the same scoring models that are used when have your credit pulled by your Loan Officer for the purpose of a mortgage loan.

FICO scores generally range between 300 and 900.

Scores are based on a person’s whole credit picture. No one factor determines a score. A credit score is a composite of both positive and negative information such as missed payments or bankruptcies (if any) as well as accounts paid satisfactorily. That said, several areas of the credit bureau report carry the most weight in a credit score.

You might consider getting added as an authorized user on a credit card account that has excellent payment history is over 3 years old and has a high credit limit with a low balance. This could increase your credit scores by as much as 20 points per account.

Slight variations in your credit score can have a dramatic effect on the rate you can receive on a home mortgage.

Always review your credit to be sure it is correct.

When shopping for a mortgage or any item that may require a credit check, do not allow your report to be pulled too many times. If your report is pulled too many times, in a short period of time, your credit score may adversely affected.

Free Credit reports advertised never give you a detailed information. It gives you just the accounts open and their balances. They don’t give you scores. A free report is not always the best representation of your credit. You should consultant with a mortgage counselor to get a more detailed view.

A credit check inquiry stays on your credit report for 12 months.

Most lenders obtain scores from three sources and use the middle score to base your qualification.

No more than 7 inquires will be used to calculate the score. Multiple inquires within 14 days, will be counted as a single inquiry. This applies to auto inquiries and mortgage inquiries. Being late on your mortgage is no worse than being late on your credit card. A 60 day or more late is significantly more damaging than a 30-day late. In most cases an unpaid collection is just as bad as a paid collection.

Credit scoring is a scientific method that uses statistical models to assess an individual’s credit worthiness based on their credit history and current credit accounts. Credit scoring was first developed in the 1950s, but has come into increasing use in the last two decades.

Your credit score can play a vital role when lenders decide to extend you a loan. Over 75% of mortgage lenders and nearly 100% of subprime lenders review your current credit scores when making lending decisions, and depending on your score they may offer you a different rate or term then they would otherwise.

I can understand how your credit score can be confusing. I want to thank you for reading the information above. If you would like to continue this conversation than please contact me so you and I can discuss your financial situation. Please read more valuable information and when you feel comfortable I would like you to contact me.

Biggest single factor to credit score is your mortgage. Having one mortgage late is a red flag.

By keeping all of your revolving credit balances below 50%, you will get a higher score. Below 30% is even better

Yes, mortgage accounts are looked at big time. FICO scores are most affected by lates on mortgages than lates on credit cards. They figure, if you cannot be financially responsible enough to pay for your house (the roof over your head) then you are not financially responsible at all. I’ve seen 100 points be taken away from a single 30 day late on a mortgage.

Sometimes credit bureaus can report inaccurate information about you. It is important to resolve these issues since they may hurt you in the loan process. You should talk with your broker about any inaccurate information or contact the three major credit bureaus. Equifax Credit Bureau P.O. Box 740241Atlanta GA 30374-0241(800) 685-1111http://www.equifax.comExperian (Formerly TRW Credit Bureau)P.O. Box 949Allen TX 75013-0949(888) 397-3742http://www.experian.comTrans Union Corporation (Credit Bureau)Consumer Disclosure Center P.O. Box 390Springfield PA 19064-0390(800) 916-8800(800) 682-7654(714) 680-7292It is important to check your credit report annually for errors or potential fraud. If you suspect errors, immediately contact the three credit reporting agencies. If you believe there is wrong information, you should be prepared to provide documentation to the agencies so that they can clear it up.

If there is incorrect information on your credit report such as a payment that was reported late that should not have we will be able to correct the information within 3-5 days by going directly through the 3 major credit bureaus and get a rescore to reflect what your credit score should be.

It might be worth taking a look at your credit report to see just what potential lenders are going to find on your report. In fact, you are entitled to a free credit report within 60 days if a lender has denied you credit based on their review of your credit report.

Credit reporting is an imperfect system and there are times when you’re credit is tainted and it’s not your fault. Equifax, Experian, and Transunion don’t always report the same information. For example you may have a 30 day late on a credit card reported on Equifax, but the same card shows no lates on Experian and Transunion. Unfortunatley, the rate you receive is contingent on your credit score. It may not be fair but that’s how the system operates. One of the credit reporting agencies I use, Advantage Credit, has the ability to fix mistakes on your credit in a matter of days. It’s called rapid rescoring and it can make a world of difference in getting a decent rate. Recently they were profiled in Newsweek.

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